hello and welcome to our parents' erasure with their top stories. in movies slops a negative outlook on the news with a possible downgrade looming on the merry go round of neuroscience meetings fails to all of the solutions that's. the single currency. tough financial times tough people in can of those french speaking come back increasingly opting point independents people are set to go to the polls to choose their government but the separatists spinning around. and the u.s.

is said to be ratcheting up its threats against iran in a bid to delay a possible israeli strike against the country and washington could be under pressure from israel to declare certain red lines over to check problems for nuclear program. to try and say with r t the cause a report is next. max keiser this is the kaiser report the global stratification amongst classes various groups continues now in the u.k. we've got lovise versus toffs stacey well in my

first headline max i have this academic arrested after polite graffiti is found on cars rather than the usual swear words tags and rude pictures max and academic has apparently been putting graffiti on posh cars in his neighborhood reading really wrong arbitrary very silly he's inscribed these with a screwdriver in their cars oh lovely your use b.m.w. in my neighborhood is really wrong with a screw driver scratched into this and of course he says in france of course there's a big emphasis on grammar you know when they're committing this kind of lobby on top then the lows on that have to grammar as to be good of course this made me think of the g.o.p. convention where we see there's such a thing as polite rape and rape so we have the tea party which the libertarian think tank cato which was founded by marie rothbart and the one of the

koch brothers they have declared that the tea party is libertarian at its core when you say cato you know referring to the pink panther sidekick ok so here's the headline from this libertarian at its core group. tea bagging for the military industrial complex so tea party nation leader judson phillips told the economist magazine max he said if we decide to build a couple of new carriers aircraft carriers thousands of workers would be hired for the shipyards thousands of employees would be hired for the steel mills it means they would receive paychecks and go out and spend that money so we should use this sort of government spending we should expand the military and this is a good kind of big government a good kind of government spend not that bad stuff over there for social welfare

services and food stamps and health care or exploration of mars or landing on the moon landing of course generated the technological interest in the interest in science which resulted in giving us things like microsoft apple oracle you know the s. and p. five hundred moves the past twenty years but that's bad government you don't want the government involved in initiating any gun of scientific endeavors or infrastructure or anything like that you want government to be purely in the business of procuring weapons of mass destruction and perpetrating war around the world because why it's the easiest way to make a quick buck there's nothing easier as i said on the show many times in a war and the prison business was america into now war in prisons has got the highest incarceration rate the world the us was the fastest growing industry in the u.s. corrections core of america in the prison business was all the legal barriers to our democracy being shattered in town after town in america because all the love is from the president taking on those governments and arresting mabel and throwing

them into the for profit prisons the tea party travels around america holding giant rallies saying we need a small government small government all their websites say we need small government small government small government and yet fifty percent of us taxpayer dollars up to fifty percent if you include all the black ops and the health care for the veterans my. thanks beck that takes a fifty percent of all tax revenue so they somehow think they could apply that to and put them into one concept together oh you mean economics oh no the tea party doesn't consider economics the fact that all those money you spend the day you borrow the trillions to invade iraq and afghanistan and syria and then the trillions spending on the taking care of the permanent brain damage to come back from these wars those that's all off balance sheet that doesn't actually an item that we have to worry about as part of that fifteen sixteen twenty twenty five trillion dollars worth of debt that simply exists in a magical place called candy land where it's never have to be paid off and that's

what we're really arguing about here when the tea party is battling occupy wall street to were some liberal group it's all about just splitting up the money for their own special interest just because it's your special interest and you really really care about it it doesn't mean it's not government spend it the special interest welfare bums the are the military they get money because their special interest is to explode a lot objects that drown out the sound of everyone else looking to participate in some kind of communal governmental experiment called a country but because they have the the boom boom sticks and the loud bombs and they drown out everyone else's voice you know there's an old saying the squeaky wheel gets the oil you know that the squeaky wheel of the pentagon gets all this free money to go out there and economically destroy itself as a suicide bankers do or the country at large and don't forget all the millions of

innocent civilians they murder for fun and profit. and now justin phillips finishes up his statement saying the military the u.s. military is a better investment than say spending money on teaching chinese prostitutes how to drink responsibly i question the. wm mean if you teach those chinese prostitutes how to drink responsibly they too could run for congress in america. and now a headline on the same topic so at the g.o.p. convention the enemy within so the tea party held a tribute to the military and the journalists here was observing that every speaker wanted more war not less bloody or simple war just because they're lazy because they don't want to work for a living bain capital is a way not to work for a living it's a way to strip companies with debt and employ debt and increase debt you don't want to actually work for a living you want to parade around on stage and you know put some pastries on your just and put them around in opposite directions and pretend you have some significance in this world other than the fact that you're

a rotting no good leverage by google and look at the two billionaires behind this tea party sort of movement you have the koch brothers who profit from the higher oil prices and energy prices then you have sheldon adelson who this whole war sort of mentality benefits sheldon adelson because most of his income comes from china and if. the g.o.p. platform has now announced basically that when they get and they're going to decree that china is a currency manipulator so the un he thinks will rise his income will go up so it's all about you could make graffiti polite but it's still graffiti you could say you're about freedom and liberty and all this other stuff when it's really just about destroying your competition getting monopoly powers and so forth so sheldon adelson of course you've mentioned his income comes from casinos chinese casino so he knows a thing or two of a chinese prostitutes and yeah they could run for congress and he's down there at

the r. and c. in florida hobnobbing with everyone else who wants to get better there is johnny's prostitutes and that's the entire point of the entire convention was how best to get better johnny's prostitutes in ten easy lessons invision by clint eastwood that's what i do all my takeaway from the whole event was speaking of clint eastwood g.o.p. platform the war on drugs and the war on terror have become a single enterprise this was item number seventeen on the g.o.p. platform so they've now admitted that their war on terror and the war on drugs are single enterprise and i thought of the empty chair syndrome when they said mexicans bear are bearing the brunt of drug cartels savage assault and that's why we need to spend more to go protect them from our we're fake war on drugs and now war on terror they're like speaking to an empty chair of mexicans who want somebody made the point recently and i think other than the chinese prostitute point is valid

that the u.k. chinese addicted to opium and then they outlawed it and then it became a huge gang warfare here you've got the u.s. using mexico to recycle money and drugs to get americans addicted to mexican drugs so it's very similar situation you have the same group that toph's in britain who are controlling the world at that time you have this. same kind of toff that you know of the global economy using a whole country mexico in their supply of tons and tons of cocaine into america and recycling through walk over which is now was fargo or through a just b.c. or barclays implicated in huge multi hundred billion dollar money laundering scandals to usurp these countries and essentially to appease their inner need as we saw at the g.o.p. convention to hobnob and rub elbows with chinese prostitutes the tea party people were freaking out here you ask that you ask what do you love small government yes

we do so that's the proof item number seventeen look no further they are dupes for a giant government scam but according the culprit there is the phrase we the people is a communist plot because it is the world we anyone in america who is harping on this government is too big theme is a self hating american in other words america was invented with the idea of we the people what what what about the war we are the koch brothers confused about well in fact the g.o.p. party platform says we have to return to the constitution but this is totalitarianism when they want to go back to race history right in their own words and say look that's our history they want to just completely rewrite the constitution and replace we the people with brother and then finally you know they of course nominated mitt romney the federal bailout that saved mitt romney

government document proves the candidate's mythology is just that so mitt romney is running on this myth that he saved bain and company which was the consulting side of bain capital which is the leveraged buyout firm. we only have a few seconds left so what i'm going to say is basically rolling stone through freedom of information request found documents that prove that in fact he mitt romney is responsible for shifting to least ten million dollars to the taxpayer through the f.d.i.c which owned one of the banks that was basically stiffed by bain and company and he stiffed them by a poison pill threatening to blow up his company when the f.b.i. c. went to bain and company they found that they only had an h.p. printer and that was their only assets that the f.d.i.c would inherit if they actually didn't agree to basically write down ten million dollars in debt the bating bowed to the f.d.i.c the federal deposit insurance company yeah well i mean

that's all j.p. morgan is they have a negative that one of the hundreds of billions of dollars it's all the federal reserve the all the curfuffle about auditing the federal reserve is that when they open the vault and say oh where is our money they're going to find a printer when they open up for not the same words are gold are going to find a purchaser over there lloyd blankfein j.p. morgan's last goldman sachs sample of all this only i was a printer these two big nothing but a printer it's amazing that the company that makes printers sula placards doing so poorly considering the only thing that any of these companies competence was a is a printer stays there were thank so much for being on the kaiser report thank you rex don't go away stay right there much more coming.

they were young and high flying. their careers were on takeoff. that flight for them was one of many. and the last one. locomotive. leaving the ice on our team. you know welcome back to the kaiser report i'm max kaiser time not going to niceville florida talk with karl denninger of market hyphen ticker dot org due to popular demand we've invited karl back on to finish where our last conversation ended which was on the topic of libertarianism karl denninger welcome back to the kaiser report thank you max ok now you wrote in your blog race and lay karl the

unmourned victims are banks or politics so let's start with your thoughts for example on offshoring tell us about why this so-called free trade is not in fact genuine libertarian policy problem with offshoring as it is practiced today is it is not as is often asserted a function of free markets just. who are we are not talking about a corporation that chooses to take its labor offshore because the people there are smarter are willing to work harder and therefore produce a superior product at a better price if that was the case that would be capitalism but that's not what's going on instead we have companies that offshore their labor because they can enlist their governments in what amounts to corrigan so we have for example cases where people's agrarian way of life is literally just royd by their so taylor told

how terry and government coming in a bulldozer in their fields paving over their areas and then say oh by the way here's a great new fresh effort you can go work in and the alternative if you don't want to do that is that you start the other problem that you have with in this so-called offshoring movement is that so much of what use going on especially in the high tech area where you're building integrated circuits and things like but this is today's process this is. currently are fairly disruptive to the environment the products that are put together in the high tech curia use a lot of very noxious chemicals and it's expensive to dispose of those properly but if you go over to china and some of these other third world countries their government doesn't really chair and so what ends up happening is that instead of paying the cost to properly dispose of the by products of these manufacturing processes these companies simply throw the stuff away and poison the land air and

water and of course who will go along with that is the people of this too is not capitalism it is not libertarian thought either because the promise of libertarianism is that you may do whatever you like because long as you don't harm anybody else so there's a little bit of a disconnect here between the concept of being a libertarian and the concept of free trade where the harm just happens somewhere where it's out of your vision it is my assertion that if you inflict harm on another person whether it happens here in the united states or whether it happens in some you know for lauren place in china the fact of the matter is is the core mission is coercion and if i'm always in the land or in water and i'm not engaged in something that could be considered libertarian right now karl the as you describe it libertarianism you've got a as a find out say in the u.s. with the constitution as the arbiter of legal boundaries eve

got a group of folks that are pursuing profits in a capitalist system and the distribution of resources visa v. the market visa v. capitalism is a proper ball of her let's say the government getting into the business of distribution what happens when somebody doesn't offshoring campaign in a company is offshoring or they are involved in massive. pollution as you described it that they'll typically come back and say well that's what the market is that that's the market that they and then the market becomes a catch all phrase where and justifies everything mr market kind of justifies this behavior it seems to be no discussion about what makes a market really it just falls into something called the market so that how do you differentiate between let's say an actual all market of of that that

supports a libertarian view. that as you're describing it versus just a catchall phrase that seems to a lot of junk seems to go in and is just incorporated in this concept that that question kind of i hope it makes sense to your thoughts and if it does max that you know the libertarian party or three if you actually look at the governing documents and the foundation of rove principle behind the libertarian party likes to call itself the party principle and the founding principle behind a libertarian party is what's called a non-aggression principle and what their principle states and by the way it's the only political party that requires that you take an oath to join you are required to swear or affirm that you do not believe in the initiation of force to obtain political or social goals well initiation of force is pretty clear if i hold you down and beat you with a stick i've obviously initiated force if i pollute the land and water that you

that you live on with your permission and nobody in their right mind would grant that of course then i have an issue to force so were the libertarians. are running for office seem to have some problems and the party seems to have some problems in general with some of its policies is dead it talks a really nice game about to being the party of principle but when you get down to it the difficulty is did you have to apply this principle even while you. otherwise you're just talking up all sides your mouth so what i assert is that if you're going to claim to be a libertarian you're going to run as a libertarian you're going to be a libertarian then you have to take the position that initiation of force is wrong and that means that if the purpose of your offshoring is to have bill yourself effectively slave labor or a place to manufacture your products where you can poison the air land and water without reckoning then you're not a libertarian at all you're jack booted statist you're just trying to find

somewhere where nobody sees what you're doing you know that it's an interesting concept that people were raised that well this raises the standard of living for the people that are doing you know that are doing the labor because they were gathering rice and rice paddies before this shiny new factory showed up and my retort to that is that you could also make the argument that the slaves that were brought over from africa or were living in straw huts and after they were brought to america they were living in houses now they may not have been you know to their labor was coerced and forced but nonetheless you could make the argument that hey look that's a real rough it's got you know that house has walls it's not me out of straw the fact that somebody has gotten a better standard of living in some measurable way however does not change the fact that they didn't choose to set of circumstances under which they currently labor and so we as a libertarian and we have to i believe we have to look at this from a different point of view which is that the constitution provides the united states with the means to redress this that's tariffs we don't want to talk about that

because we say well that's the government interfering in this but the fact of the matter is is that if government has a right to exist at all there's a purpose behind it is to arbitrate disputes and to take redress of action when somebody is aggressive and so if i rob you the the reason that we have a government is the so that somebody can come along and say what you this person the jail right so what you're describing there is you're saying this. current crop of so-called libertarians they found to account for these extra analyses in terms of the pollution that they're generating there mischaracterizing the true motives behind offshoring and that let's look at the financial industry and the end your thought about coercion and use of force as it relates to the financial industry because most people equate the financial industry as being quote victimless that there is it's just paper moving around there's no crimes attached to it there would be no coercion attached to it your thoughts go. well it's absolute nonsense max the

fact of the matter is rio look at the library scandal for example there's been people who've said well you know for every winner that was a loser if you if you got over charge somebody else got will own money at a at a lower rate and i will simply observe that i can make the same argument for auto theft if i steal your car there are still the same number of cars that exist in the world that i may have it in you no longer do this doesn't change the fact that what i did was course if you didn't consent to me taking your view. there's there's very little argument to be made here i believe within the libertarian perspective fraud which is the intentional misrepresentation of something for your benefit and somebody else's doctor of it does not fall within the mandate that says you must not aggressed against up or it's all right so if we've got this dynamic set up here between the libertarianism they tend to focus on government versus markets now

let's look at the government side of things of course that would include like regulation you know government does regulation so. there's a lot of there was a move to get rid of glass steagall of course under sandy weill citi bank as part of this move to deregulate then we had the brooksley born reported and refusing to regulate fraud in the derivatives market you know she had that isn't it with alan greenspan and robert rubin and so there has been under the so-called libertarian flag a move to deregulate because of their interpretation of the government that is being interfering with your thoughts well again hard i would argue that that is pure nonsense and that you've got some people that are trying to use the libertarian banner it as a cover for yet more theft this time by the financial industry the fact of the matter there is that the creation of unbacked credit within the financial system that is the giving of credit with no collateral i do is nothing other than

counterfeiting. if you look at it from a mathematical perspective that's exactly what you have you have ten thousand units of production and ten thousand units of credit currency in one unit of one by one you know to the other if you can met make another ten thousand units of credit currency here then you have stop bolen value from all of the people who currently held credit in currency because now one unit of production requires two units of credit or currency to buy it so if we're going to claim that we're going to we're libertarians then we have to take the position that the deregulation that we are speaking of year that needs to be enforced is the most not counterfeit because if it is something that we should prohibit i cannot write off hundred dollar bills in my office copier i don't see why it's any different if the banking industry turns around and issues a bunch of on back credit but the exact same impact in the markets is if i ran off those hundred dollar bills all right said second who have just said going to

current example you've got mitt romney he's the republican nominee for president his business model i went over a bank capital essentially leveraged buyouts private equity loan companies up with debt extracting equity going on as part of that whole financialization of the economy on wall street a what as he built wealth and n.c. a libertarian. poise definitely not a libertarian i don't begrudge anybody who takes their own capital or other capital from people and turns or down and uses that as a means to acquire businesses that are in trouble fix them and then sell them back into the market and once you fix them if you've done a good job there they have a greater value than they had before and therefore you make a profit. that that's capitalism there's nothing wrong with it there is something however very wrong with using leveraged buyouts where the credit that's created came out of nothing comes from thin air because then what you're doing is you're

using the counterfeiting of the banking system to extract a piece of the value that is with net company and whether you grew the value within the company and the process is known or turtle it's where did you get the so-called capital did the capital actually exist or did you just invent it with the help of the banks turps and what we've seen all too often is that the latter is is the case that we have and in many cases where not only that we have that coupled with the offshoring at the same time where these companies are taken over the labor is off shored for the explicit purpose of getting access to central slavery and evasion of environmental regulations and so that's where the so-called value add comes from is that we take what we're structures on the pollution of air land and water and say oh well you know we can take ten million dollars a year out of the production cost of this facility if we're allowed to pollute but we can't do that in the united states so what with the plant china i don't see is capitalism or libertarianism at all they're not all right karl that is around in

time thanks for being on the kaiser report. thank you are i not going to do it for this edition of the kaiser report with may max kaiser and stacy herbert our fact my guess karl denninger of market ticker dot org is going to send an email please do so at kaiser reported r t t v dot are you.